By Jed Horowitz

NEW YORK (Reuters) - Six weeks after being named to lead Morgan Stanley's brokerage force of more than 16,000 financial advisers, managing director Shelley O'Connor has streamlined the sales organization and replaced some key executives.

In a memo to the firm's wealth management division employees, O'Connor said a tour of the branches at the world's biggest brokerage convinced her that local managers need more power, resources and the ability to work more efficiently.

She also is reducing expenses by shrinking the company's three geographic divisions in the United States to two and trimming the regions that report to the division heads to eight from 12.

Bill McMahon and Rick Skae remain as Morgan Stanley's two division heads, running the western and eastern divisions, respectively.

Douglas Kentfield, who had run the western division since the three-division structure was formed in July 2012, is leaving "to pursue other opportunities," according to the memo that was sent to Reuters. Kentfield was one of the few senior brokerage executives at Morgan Stanley who previously worked at Smith Barney, which Morgan Stanley began absorbing in 2009. It completed the purchase of Smith Barney last year.

The four regional managers who are losing their positions - Jeff Adams, John Campbell, Kevin Forman and Matthew Maloney - "will explore new leadership roles" within the wealth management division.

"We wish all of them much success," O'Connor wrote in the memo.

The changes are effective at the end of May.

O'Connor and the executives who are losing their positions were not available to comment, a spokeswoman said.

Morgan Stanley has made a bigger bet on selling financial services and products to wealthy individuals than any major competitor. Since buying Smith Barney from Citigroup Inc, retail brokerage has dominated its bottom line in some quarters. The division contributed 47 percent of the investment bank's total revenue in last year's fourth quarter.

As part of the integration, dozens of overlapping branches were eliminated along with branch management positions. In her memo, O'Connor said her spending priorities will be on support for brokers who are banding into teams and on naming more assistant "complex" managers to coordinate sales and supervision of branches located near each other.

Greg Fleming, head of wealth management, named O'Connor to run sales for the division as part of a broad reorganization he announced in late February. Previously, O'Connor had run the firm's private banking group, which is charged with selling more loans and credit products to the brokerage unit's wealthy clients.

O'Connor also has expanded the responsibilities of some other executives and named a few to new positions.

Mandell Crawley, who heads business development to help advisers retain clients and recruit new ones, takes on additional duties running Morgan Stanley's training program and its rewards programs for successful advisers, according to the memo.

Barry Goldstein will become chief operating officer of the wealth division, responsible for all business management activities and for developing recruiting and compensation programs for the firm's 16,456 brokers.

Lisa Golia continues as chief administrative officer with responsibility for branch services and client communications, but also will work more actively with technology on development of brokers' workstations and platforms.

Fleming last year said he was adding $500 million to Morgan Stanley's technology budget to answer brokers' concerns about poor integration of the Smith Barney and Morgan Stanley systems and better serve clients.

"We will continue to invest in technology to drive service efficiencies in the branch," O'Connor wrote in the memo.

Morgan Stanley is the second major U.S. brokerage firm in a month to shake up its sales structure. Merrill Lynch in March replaced or transferred more than a dozen of its branch and regional managers.

(Editing by Jan Paschal and Matthew Lewis)